Bananas: How the United Fruit Company Shaped the World

Bananas: How the United Fruit Company Shaped the World

Diversifying is key for investing success, and wise investors understand the foolishness, even danger, of relying too heavily on a single product or company.

Bananas became a problem mono-product for Central America as well as a symbol of rapid and reckless globalization, argues Peter Chapman in his book, "Bananas: How the United Fruit Company Shaped the World." Over-reliance on bananas for livelihoods, profits and political power by governments throughout Central America and the multinational corporation contributed to economic stagnation, poverty and resentment throughout the region. Leaning too hard on one crop or one company minimizes competition and hardly meets the need of a free market offering choices and opportunity for innovation.

Tempted by fast profits and creation of easy jobs, countries who take such a path become subject to the vagaries of demand. Profit-making for a few interferes with other purposes, including education, community and social development, cautions Chapman. He details how United Fruit, based in the US, operated with minimal regulations throughout Central America - resisting government controls, exploiting workers, damaging the environment, and contributing to a series of booms and busts that wreaked havoc for the poor. In confronting such relationships, even discerning policymakers throw up their hands, helpless about what Chapman calls the "full capitalist anarchy option, namely globalization."

Unfortunately for Chapman, his attempt at comprehensiveness by chasing too many strands, does not make for a good tale. In a valiant attempt to lay out the complete story - the history, politics, culture, the ecology of the tropical herb - Chapman packs massive research and reporting into 200 pages, and in the process, complexity in analysis is lost.

Chapman could have better managed the analysis with in-depth focus on a few key players with power of manipulation. Of course, every reader would select different characters in a tale that spans more than a century and long for more details: Brazilian singer Carmen Miranda and father of public relations Edward Bernays, who each contributed to banana branding; brothers John Foster Dulles, US secretary of state, and Allen Dulles, CIA chief, who during the 1950s used companies and countries like chess pieces to build deep fears of communism and further political goals; and Fidel Castro and Che Guevara whose resistance against corruption in Cuba and Guatemala evolved into violent revolution.

But then, reducing the number of characters might have eliminated the intriguing revelations from celebrities as minor as Frederick Upham Adams, and the summary treatment of such characters is emblematic of Chapman's problems and one-sided indictment of globalization.

Adams was an ardent disciple for globalization with his 1914 book, a passionate tribute to bananas, economies of scale and the United Fruit Company for its contributions to agriculture in Central America. Adams' book reflects turn-of-the-century global curiosity, confidence and respect, despite the aggressive nature of its title, "Conquest of the Tropics: The Story of the Creative Enterprises Conducted by the United Fruit Company."

Adams describes his first glimpse at a banana plant at the 1876 Centennial Exhibition: "I had seen pictures of banana trees in text and Sunday-school books, and I had derived from them the pleasing but - as I have since learned - inaccurate information that the fortunate natives of the tropics have nothing to do but roam the flower glades and live on bananas," Unfortunately, in rushing the narrative, Chapman misrepresents Adams, deleting reference to the author's own adulthood recognition of the inaccuracies.

Naturally, an abundance of material forced Chapman to skip examples and insights. Chapman draws fascinating parallels between the US government's oversights in its dealings with United Fruit and modern companies like Enron. Adams' book could have provided rich fodder in this area as well, especially about how threats to cheap prices of popular commodites become the most common target for public wrath - rather than greed, inequality or corruption.

Consumers, more so than businesses, make price a priority, and Adams suggests that's why the world develops in spurts, with innovative bursts and disappointing setbacks. "The Public - that mysterious entity which is respected and reviled, feared and defied, but which always wins when it gets mad - aroused itself and sounded a deepening thunder of protest," Adams wrote, describing the fury over a proposed import tax on bananas.

Chapman does not dwell on the public amazement from a century ago over how exotic fruits, grown in far-off countries, were one-fifth the price of apples and pears harvested a few miles away from city limits. But he provides poignant evidence that decades of intense focus on making a living and profits from a single crop, establishing a world commodity, transformed the exotic banana into just another ordinary item on the shelves of grocery stores.

Chapman cautions that multinationals can surround themselves with the best people, policies on corporate social responsibility and ethical codes and none of these guarantees against abuses. "We continually put ourselves in a position to be surprised," writes Chapman. "We are shocked when it is revealed that we have been 'sold' a lie. Then we get embarrassed and try to forget, as we did with United Fruit."

The worthiest message to emerge from Chapman's book is that governments and consumers need not give free rein to multinationals, creating huge global forces and then acting as though there is no control. "Today's advocates of multi-national power would have us all as banana republics," Chapman notes. In such an environment, even the exploiters eventually become exploited; United Fruit quickly turned its back on dictators who made excessive demands, and the company became a sacrificial lamb when US regulators wanted to prove they could crack down on corruption.

Chapman briefly presents Costa Rica as one Central American state that resisted its role as "banana republic," by reducing poverty, improving education and laws, extending life expectancy and protecting about one quarter of its land from development.

In a globalized world, people have more opportunity than ever before to study the choices - between protected lands and miles of strip malls pocked with vacant signs, between rote jobs or workplaces that encourage innovation and progress. In making choices, both business communities and consumers cannot forget that the same forces of globalization that spread marketing and profit-taking can likewise spread the vision and tools for reform.

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